A ruling from the Board of Appeal for Environmental and Food Affairs has just concluded a case of principle regarding the lapse of commitment, repayment of grants, and exclusion from applying for support under similar schemes in 2021 and 2022. The Board ruled in favor of our client – a farmer – stating that the extensive sanctions imposed by the authorities were unjustified.
The case concerned the farmer’s application for subsidies for the establishment of a new slaughter pig farm. In 2016, the farmer had applied for a commitment to a grant for the project with several thousand livestock places. In 2017, the Danish AgriFish Agency granted the farmer a commitment to a grant for the applied project. The farmer requested payment of the subsidy in 2018. Some years later, after inspection, the Agency assessed that the stated number of livestock places was incorrect. According to the Agency, fewer livestock places had been established than originally stated. The difference was due to a simple calculation error made by the farmer’s external advisor, where a parenthesis in the formula for calculating m2 to livestock places was omitted. This technical error meant that the calculated number of places was too high. Despite documentation and the fact that the farmer, naturally trusting a professional advisor, had submitted his application in good faith, the authority assessed that the error should be sanctioned according to some of the most far-reaching provisions of EU law. This led to a decision on the lapse of the commitment, a demand for repayment of the subsidy, and exclusion from support schemes for two years. Just as the Danish AgriFish Agency chose to report the farmer to the police.
“Simple calculation errors are considered sanction-free omissions under EU law. They must not be confused with sanctionable bad faith violations. Justice must be served – also in the reality of agriculture”
Via Sønderby Legal, the farmer lodged a complaint against the decision, referring to the EU law’s principle of proportionality, the principle of legal certainty, and established practice from the EU Court of Justice regarding good faith and accidental errors in subsidy applications. The case went on to be processed by the Board of Appeal for Environmental and Food Affairs, which agreed: There was no question of false information in the EU legal sense, and the error could not be described as negligence. The Board emphasized that the error had a clear and documented cause, and that the farmer had not attempted to obtain unjustified support. In addition, the Board established that the application of Article 35(6) of EU Commission Delegated Regulation No. 640 requires a concrete assessment – and cannot automatically be applied to technical errors.
The decision marks an important victory for all who navigate the complex landscape of EU support schemes and national administrative procedures on a daily basis. With the decision of the Board of Appeal for Environmental and Food Affairs, it is now established that it has a legal consequence when the authorities resort to the harshest sanctions without sufficient legal and proportional consideration. It is an important reminder that good faith, accidental errors, and actual fulfillment of support purposes must not be handled as formalistic and automated administration.